This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
We can eradicate this fear with one simple action
However, for people with traditional types of income, there is still an underlying fear that can often present itself: What happens if I lose my job?
This fear is familiar for many, whether you’re excelling at your job, an average employee, or underwater. You don’t need to invest further energy into this feeling if you have one thing in place, though.
What is the thing?
The emergency fund, of course. And I’m not talking about a 3–6 month emergency fund – though this is an excellent baseline. I’m talking about a 1–2 year emergency fund.
If you have plenty of savings to last you, not just for a rainy day but for an entire rainy season, you’re good to go and can relinquish any financial fears about unemployment.
If you have a 1–2 year emergency fund, you can probably even afford COBRA insurance, but you don’t have to if you implement some other strategies. Read more about these strategies here:
Are You Too Tied Up?
We’re often too tied up with our jobs. We don’t even realize the dependence that we’ve developed on our jobs. Our whole livelihood depends on our jobs, which is an unhealthy position. For most people, if they lose their jobs, sh*t will hit the fan real quick because we don’t have a second income source nor a fully stocked emergency fund.
At least a third of people have a second income source, but what about the rest of us?
You don’t have to depend on your emergency fund 100% if you have another income source; this will alleviate some stress if you lose your job.
A Benefit of Decreasing Financial Dependency On Your Job
Some other benefits of having a secondary income source and a 1–2 year emergency fund are that you experience less pressure on your job to be perfect. Instead, you can focus your energy on learning, enjoying your job, making lasting connections, and not engaging in the anxiety that work can bring for many employees that are financially dependent on their jobs.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.